Shifting Sands - by Alessandro Barattieri (Paperback)

Book Synopsis

The 21st Century risks becoming an era of trade skepticism. A growing concern is that the export-led growth model that transformed East Asia may no longer be available to today's developing countries. Four powerful trends are reshaping the prospects for prosperity through trade. First, developing countries now occupy a precarious position between the Scylla of U.S. trade protectionism and the Charybdis of China's manufacturing dominance. Second, technological change in both goods and services is boosting productivity but weakening the link between growth and jobs. Third, as the world warms, climate change and the policy response to it could shift comparative advantage away from developing countries. Finally, the uneven pace of demographic change is likely to reshape the distribution of labor endowments and, therefore, comparative advantage. This book delves into each of these trends, offering in depth analysis of their impacts on trade, growth and jobs. The central thesis of this report is that developing countries can still prosper through trade even in this changing landscape. An excessive focus on the policies of major powers risks overlooking the decisive role of domestic policy in determining whether countries prosper or fall behind. In a world where competitiveness is critically linked to services, innovation, skills, and scale, developing countries must respond to: foreign protection with domestic reform, especially in services; technological change by embracing it; skill deficits by enhancing both capacity and opportunities; and stalled multilateralism with deeper international cooperation.